There is a small brick building on the corner of Fulton and Elizabeth; on the third floor is the Federal Savings Bank. Unless you follow the news closely, you’ve probably never heard of this bank – it doesn’t advertise that I know of, nor does it maintain a high profile.

Federal Savings was born out of Generations Bank, a Kansas thrift bought by Calk and his brother John Calk in 2011. That bank, which had about $40 million in assets, was undercapitalized, facing regulatory restrictions and posting losses for five straight years, according to a 2012 story in ABA Banking Journal, an American Bankers Association publication.

Now headquartered on Chicago’s Near West Side, successor institution Federal Savings in 2012 said it was getting $18 million in tax breaks over 10 years from the state through the Economic Development for a Growing Economy, or EDGE, program as well as up to $4 million in training money from the city of Chicago.

The bank had 842 full-time workers as of the end of March. Steve Calk has said about 10 percent of the bank’s employees are veterans like him.

Federal Savings has three branches or loan production offices in Illinois: at its headquarters and in Lake Forest and Naperville, according to its website.

Does that seem like a lot of employees for such a small bank? I wonder what they all do, and where they all fit? Who knows, I’m not a banking expert. Maybe many employees work remotely, or in Lubyanka Square?

Entrance to The Federal Savings Bank

Federal Savings Bank (FSB, not to be confused with the Russian FSB which is the successor organization to the KGB) is1 tight with the Donald Trump 2016 campaign, and with Trump’s campaign manager, Paul Manafort. Tight enough that this small bank loaned 1/4 of its assets to Manafort to cover the payments on two of Manafort’s properties, despite his seemingly shaky credit (one property was in foreclosure after a loan default, the other property was not yet in foreclosure, but was also in default).

The Wall Street Journal reports:

New York prosecutors have demanded records relating to up to $16 million in loans that a bank run by a former campaign adviser for President Donald Trump made to former campaign chairman Paul Manafort, according to a person familiar with the matter.

The subpoena by the Manhattan district attorney’s office to the Federal Savings Bank, a small Chicago bank run by Steve Calk, sought information on loans the bank issued in November and January to Mr. Manafort and his wife, the person said. The loans were secured by two properties in New York and a condominium in Virginia, real-estate records show.

…

The Wall Street Journal reported in May that Manhattan District Attorney Cyrus R. Vance Jr. and New York Attorney General Eric Schneiderman had begun examining real-estate transactions by Mr. Manafort, who has spent and borrowed tens of millions of dollars in connection with property across the U.S. over the past decade. Investigators at both offices are examining the transactions for indications of money-laundering and fraud, people familiar with the matters have said.

The Journal reported that at the time of the loans from Federal Savings Bank, Mr. Manafort was at risk of losing a Brooklyn, N.Y., townhouse and his family’s investments in California properties being developed by his son-in-law, real-estate and court records show.

Mr. Calk was a member of Mr. Trump’s economic advisory panel who overlapped with Mr. Manafort on the Trump campaign. Messrs. Manafort and Calk knew each other before the campaign, a person familiar with the relationship has said.

The bank’s loans to Mr. Manafort equaled almost 24% of the bank’s reported $67 million of equity capital, according to a federal report. Around the time they were issued, Mr. Calk had expressed interest in becoming Mr. Trump’s Army Secretary.

I walked over to this bank a few weeks ago, and it is sort of strange, at least to me. FSB is an odd kind of bank, only on the third floor of 300 N. Elizabeth, with a building security employee that won’t let you go up unless you are a member of the bank, plus they won’t allow photography in the lobby. Reading through FSB’s Yelp reviews, they seem a little sketchy, sending out loan application letters to veterans almost to the degree of spam and many other complaints of incompetence and worse. Of course, Yelp reviews aren’t the most reliable, but still, this bank has a lot of unhappy (civilian) clients.

For instance:

Horrible experience. They send letters every week to advertise being part of the VA IRRRL program. If you look, you’ll notice the phone number is different in every letter. So, you can’t trace if there’s been any complaints about the number. The representative got very defensive when he couldn’t answer why the number is different and after I asked to speak with a manager, he said he’d take me off the mailing list and hung up on me. After I tried calling back with no answer, I received a call from someone who apologized, and though he was very nice and informative, I still believe this company is very deceptive. The first guy told me they are VA owned and operated when I asked if they are from the VA. He then said its because 95% of their loans are to veterans. THAT DOES NOT MAKE THEM VA OWNED! I just learned they used to operate under the name Chicago Bancorp and they have a lawsuit against them from 2014, and the owners’ names are the same as now.

Makes one wonder how FSB is making a profit, suddenly, after years of not making profits. Maybe there are other sources of income besides veterans and tax dollars from the State of Illinois and the City of Chicago?

Reference to home values in the area suggests that the outstanding principal on the loan secured by the townhouse at 377 Union Street may exceed the market value of the property. Reports suggest that the property has been empty for the last 4 years and is currently in disrepair (link). The mortgage secured by the Bridgehampton property indicates that the borrower was required to deposit $630,000 as additional collateral. The mortgage secured by 377 Union Street indicates that the borrower was required to deposit $2.5 million as additional collateral.

A former senior official said Mr. Mueller’s investigation was looking at money laundering by Trump associates. The suspicion is that any cooperation with Russian officials would most likely have been in exchange for some kind of financial payoff, and that there would have been an effort to hide the payments, probably by routing them through offshore banking centers.

Since President Trump won the Republican nomination, the majority of his companies’ real estate sales are to secretive shell companies that obscure the buyers’ identities, a USA TODAY investigation has found.

Over the last 12 months, about 70% of buyers of Trump properties were limited liability companies – corporate entities that allow people to purchase property without revealing all of the owners’ names. That compares with about 4% of buyers in the two years before.

USA TODAY journalists have spent six months cataloging every condo, penthouse or other property that Trump and his companies own – and tracking the buyers behind every transaction. The investigation found Trump’s companies owned more than 430 individual properties worth well over $250 million.

Since Election Day, Trump’s businesses have sold 28 of those U.S. properties for $33 million. The sales include luxury condos and penthouses in Las Vegas and New York and oceanfront lots near Los Angeles. The value of his companies’ inventory of available real estate remains above a quarter-billion dollars.

Profits from sales of those properties flow through a trust run by Trump’s sons. The president is the sole beneficiary of the trust and can withdraw cash any time.

But the Justice Department inquiry led by Mueller now has added flavors. The Post noted that the investigation also includes “suspicious financial activity” involving “Russian operatives.” The New York Times was more specific in its account, saying that Mueller is looking at whether Trump associates laundered financial payoffs from Russian officials by channeling them through offshore accounts.

…

In that context, a troubling history of Trump’s dealings with Russians exists outside of Russia: in a dormant real-estate development firm, the Bayrock Group, which once operated just two floors beneath the president’s own office in Trump Tower.

…

One of Bayrock’s principals was a career criminal named Felix Sater who had ties to Russian and American organized crime groups. Before linking up with the company and with Trump, he had worked as a mob informant for the U.S. government, fled to Moscow to avoid criminal charges while boasting of his KGB and Kremlin contacts there, and had gone to prison for slashing apart another man’s face with a broken cocktail glass.

In a series of interviews and a lawsuit, a former Bayrock insider, Jody Kriss, claims that he eventually departed from the firm because he became convinced that Bayrock was actually a front for money laundering.

Kriss has sued Bayrock, alleging that in addition to laundering money, the Bayrock team also skimmed cash from the operation, dodged taxes and cheated him out of millions of dollars.

which makes this real estate transaction, a few blocks away2 from FSB’s West Loop HQ so eye-catching:

The record purchase price for a West Loop condo is set to more than quadruple, with a buyer agreeing to pay more than $5 million for a not-yet-built penthouse on Washington Street.

The asking price is about $5.6 million for the home, which is under contract. The listing agents declined to provide any details on the buyer, whom they referred to only as “he.”

…

Construction is scheduled to start next month, with the building ready for occupancy by summer 2018.

…

The penthouse prices astonished Baird & Warner agent Nicholas Colagiovanni, who sold the previous record-setter, a 2,400-square-foot loft at 1000 W. Washington, which closed this week at $1.2 million. It’s one of four condos sold in the neighborhood that have sold for $1 million or more so far this year.

So a condo, in a building not even under construction yet, is worth 4 times more than the previously record holder for most expensive, one on the same block? One wonders what sort of business the purchaser is in. Do they speak Russian? Hmm.